Marketing Matters is a blog that tells marketing stories from an industry, academic and student's perspective. We confront and debate today’s business trends. Views expressed by the blogs do not necessarily reflect the views of the University of Sydney Business School.

Tuesday, 30 October 2012

Over 4 years ago I started a blog (www.talkapex.com). A lot of people can say that they have done that as well. What a lot of people can’t say is that they’ve had over a quarter of a million page views since its adoption.

Though this is no Facebook success story I do consider my blog a huge personal success. For one person, who was an unknown in his respective industry at the time, going from zero page views to over 250,000 page views on a very technical specific topic is a very big feat. What’s bigger (a story for another day) is that it has opened more doors than I can ever have imagined.

How did I do it? Tons of SEO (Search Engine Optimization)? Trying to cross link my site whenever possible? Paying for advertisement on Google Ad-words? The answer: none of the above. I had initially contemplated using such services and techniques when I first started out but then read an excellent article on Seth Godin’s (http://sethgodin.typepad.com/) blog. In his blog post Seth said that if you want your site to be at the top of search engines produce consistent good content.

What? That’s it? That’s all it takes? The difficult thing is found exactly in Seth’s suggestion: consistent good content. That’s the hardest part. To post a few initial articles and get people to read it was easy. To continue to produce original and new content week in and week out was the hard part.

Though my blog is focused on a specific technical domain this example is relevant to any topic or industry that you may be trying to market. If you want to promote a product you can try to buy your way to the top of search engines or roll up your sleeves and get out the proverbial elbow grease and put some hard work into it.

Just to be clear I’m not saying that SEO is a waste of time. It is only a tool that you should use to complement your hard work, not something to replace it.

Thursday, 25 October 2012

Are brands political players that can and should use their voice to
contribute to ‘a better society’? Does it matter where they advertise,
even if what they advertise has nothing to do with the boarder message
of the medium?

For two weeks 2GB management suspended all advertising on its morning show following presenter Alan Jones’ controversial public comment that the prime minister’s father had “died of shame” over her “lies”. The comment came not long after a statement he made earlier this year that female politicians were “destroying the joint”.

The question facing advertisers today is should they return or not return to advertising on the show now that the ban on advertising has been lifted? Analysing the responses in the media today it is clear that there are two possible approaches to this wicked managerial dilemma: You do or you don’t depending on expected customer response; or you do or you don’t depending on your opinion about Alan Jones.

Underlying these responses are two distinct views of the role of brands in society: the economic view of the brand and the social-responsibility view of the brand. Taking the risk of being misunderstood, I will call the social-responsibility view of the brand the political view. With political I mean ‘having a voice in the construction of our social reality’. If we believe that brands play a role in the type of society that we are creating – whether they want to or not, then they also have a responsibility for how they play this role.

So what are the responses? Why do brand managers support – or withdraw support from – the controversial show? Respondents in the media have consistently based their argument on the economic view of the brand. They claim this is a business decision. Suzuki Australia’s general manager Tony Devers simply stated: "We're not taking sides, we just don't want to be involved in any controversy", "We have a very strong marketing program and we don't want that to be interrupted by issues that are irrelevant to our brand." The Metro Energy Group’s Tony Raya returned to advertising on the show and happily concluded that despite the fact that he received a lot of emails and phone calls of upset citizens – including one from someone who was so upset she was crying – advertising on the show worked for him. “I’ve got about 15 jobs out of it. He may be against it (green energy ed.) but it’s worked for me”. In a similar vein, A Current Affair claims that the "the strength of the 2GB audience gives us the ability to reach our target demographics".

I can only hope that the silent majority includes a great number of brands that do realise they have a responsibility that goes beyond serving the best interest of their own bottom line. What Mr Devers posits as irrelevant to his brand may not be irrelevant to society. I have always believed that social responsibility is not a role that can be delegated to a separate department in the organisation. It is the role of the brand management team to take responsibility for the kind of society their brand is co-creating. Not only for today, but also for tomorrow. And in my humble opinion, Australia would be a better place not giving airtime to people who disrespect women in leadership, including our Prime Minister herself.

Tuesday, 23 October 2012

South Korea’s rapper Psy, the performer of viral sensation ‘Gangnam Style’ song and dance, has just reached Australia. The insanely catchy video is approaching half a billion views worldwide and has become the most ‘liked’ video on the YouTube history. If you are as intrigued as I was to find out why, below are some of the marketing strategies behind it.

Engage through co-creation

The South Korean audience was engaged early on with crowd sourcing of dance movements during the video production, which led to the now ubiquitous horse dance. This co-design strategy was also used in previous marketing communications such as the Tippex ‘a hunter shoots a bear’ campaign, which was one of the case studies examined in the internal marketing lectures (http://www.youtube.com/watch?v=4ba1BqJ4S2M).

Lose control

The video was released without copyrights allowing people to own it, make new versions like the Oregon Duck http://www.youtube.com/watch?feature=player_embedded&v=mDpgzn7KuzE
and spread them over the web. This enhances distribution and awareness as previously seen with other viral videos such as Gotye’s ‘somebody that I used to know’ and Carly Rae Jepsen’s ‘call me maybe’.

Find a unique positioning

Psy cuts through the pop music clutter by embodying the anti-pop icon. In an industry where youth and good looks rule, his less-than-polished image and ‘freak-show’ style certainly make him memorable. His satire of the materialist obsessions of the residents of Seoul’s affluent Gangnam district also gave him an element of novelty, as this kind of social commentary had not previously been done in mainstream Korean pop music.

Apply learning’s from other markets in your country of origin

Perhaps not coincidentally, Psy attended the Berkley College of Music gaining exposure into American music's fondness of social commentary. The time abroad is said to have changed his perspective on his home country and influenced his apparently critical take on South Korean society. Likewise, many brands were born out of transferring foreign knowledge and practices into their home markets like in the Red Bull case, where energy drinks regularly consumed in Asia were introduced as a new category in Western markets.

Keep it simple

While the Western dance culture abounds with ever complex body movements like ‘popping & locking’, which require a seemingly robotic figure to enact, ‘Gangnam Style’ keeps it simple with dance moves any generation or culture background can pick up on. It is the modern equivalent of the ‘Macarena’ (sudden feeling of nostalgia).

Leverage brand awareness

Once you have reached high brand awareness, leverage it through brand extensions, or endorsements in the case of a personal brand. As a result of the ‘Gangnam style’ popularity, the software company owned by Psy’s father has doubled in value since July according to Reuters. Psy has also become the Novotel Seoul ambassador endorsing a lavish package for its guests, which includes a tour of the Gangnam district.

Universal message appeal

Even though most of his worldwide audience does not understand the song lyrics, they are able to relate to the universal messages conveyed by the video. Some resonate with the more futile message of poking fun at the commercial pop music industry and Psy himself. Others see a rather notable message highlighting social differences and a lifestyle that cultivates over-the-top ostentation. Hopefully, the latter message is the predominant one.

Thursday, 18 October 2012

Decisions are made based on MEMORIES of experiences and not the actual experiences according to behavioural economics Nobel Prize winner, Kahneman. This has important implications for the field of marketing, which is largely focused on creating the perfect customer experience.

A great example from the video below tells the story of a man who had been listening to a symphony, and it was absolutely magnificent music. However, at the very end of the recording, there was a terrible scratching sound, and he reported quite emotionally that it had ruined the whole experience. But it had not; what it had ruined was the memory of the experience. He had had the experience, 20 minutes of glorious music, which counted for nothing, because he was left with the memory. The memory was ruined, and it was all he had gotten to keep.

According to Kahneman’s Peak End Theory, when we evaluate past experiences, we tend to rely on the most intense part (Peak) and on how they ended (End). As both of these moments coincided in the above example with the unpleasant scratching sound, the memory of the person was of a negative experience. Practically all of other information appeared to have been forgotten.

This is one of the many fascinating cognitive biases we have been exploring in the Market Research for Decision Making unit of study of the Master of Marketing. This concept can be applied to areas such as customer service by getting bad news over with early, so that customers focus on the more positive subsequent elements of the interaction. A positive ending, such as complimentary desserts served with the bill at a restaurant, leverage this theory as the final elements of the interaction will stick in the customers' memory.

What other decision biases do you find play an important role in consumers’ experiences?

Tuesday, 16 October 2012

Facebook, Twitter, Pinterest, YouTube, Skype, Amazon, Cloud, mobile, tablets and many other platforms and technologies have not only changed the way people can communicate and interact with each other, but have also challenged Marketers to think differently about how they go to market and engage with prospects and customers.
It used to be relatively simple to focus on the 4Ps. Create a great product with a unique selling proposition, price it at a feasible level, set-up or tap into an existing distribution channel, and create impactful promotional communications material (i.e. a TV Ad).

Today we have music artists releasing songs in social media first and cutting out the studios and stations, products being released in pop-up stores, crowd sourced stunts and branded events creating massive reverberation, citizen journalists, and people simply updating us on their every move.

Get into the 4Es or fail

Product changes to Experience. Today it’s about an end-to-end, engaging journey of discovery about a product throughout the natural product lifecycle but more importantly throughout a customer’s lifecycle as well. Marketers must create positive product experiences that people can connect with at different stages. Zappos, the online shoe retailer, has produced over 200,000 videos to help improve the online customer experience. A mix of product, how to, behind the scenes, style and trends. Who said shoe shopping was boring?

Place changes to Everyplace. It’s no longer good enough to put an Ad on TV and hope they will come. Nor is it appropriate to have a retail bricks and mortar presence only. Remember how Subaru launched the BRZ sports coupe online only from mid July this year? Marketers must define the role of 1-way, 2-way and many-to many media. And product content needs to be tailored and relevant at many channels for a multitude of customer needs.

Promotion changes to Evangelism. Brand experiences need to inspire today’s consumers to engage and share their passion & product experiences with friends and colleagues. Expect good and bad sentiment in today’s globally connected social world. However both can be carefully monitored and managed.

And Price changes to Exchange value. Products are no longer a function of the cost of inputs. In today’s digitally open world, marketers need to understand consumer permission, need state and rich engagement as a function of exchanging value. In short, what are you offering people beyond the price to differentiate a product? As Coco Chanel says, “In order to be irreplaceable one must always be different.”

Great Success

So as a famous actor once said, if you follow the 4Es you’ll have great success. Hopefully it also ensures that you’re always focusing your marketing from a customer perspective rather than a business perspective.

Have you come across any innovative marketing strategies and experiences that have delivered on the 4Es?Anton BuchnerTrinityP3 – Marketing Management Consultant

Friday, 12 October 2012

The internationally renowned Cirque du Soleil is now back in Sydney
with a new big top production called OVO, an immersion into the colorful
and energetic world of insects. With incredible stunts you did not even
think were possible by the human body and mind-blowing production that
takes you away from reality, it is hard not to become a fan once you
have experienced one of their performances.

They
started as a group of artists putting on a summer festival in Quebec in
the 1980s and have now sold over 70 million tickets in 250 cities.
Revenues are currently estimated to have exceeded $700 million with 15
productions presented on four continents. The huge success so far has
been mainly attributed to reinventing the circus model, which removed
animals from performances and included elements of theatre,
story-telling and a live orchestra. Their sustainable competitive
advantage undoubtedly resides on their creative expertise.

With
this in mind, a recent case study from our Innovative Marketing
Strategy unit provided us with the challenge of developing a long-term
marketing strategy to once again bring innovation to the Cirque du
Soleil and demonstrate how the company’s business model would look like
in ten years from now. How could the circus disrupt the entertainment
industry to sustain its leadership in the coming years?

Some of us suggested incorporating the growing trend of augmented reality to create a semi-virtual circus and offer new home entertainment products. Others envisaged the circus business merging with the tourism industry to created fantasy destinations for people wanting to be an integral part of the circus experience as opposed to just being the audience. Another team saw partnerships with corporate businesses creating conferences and trade show centers that offered world-class entertainment to executives. Even a zero-gravity circus was cogitated to exploit recent advances in technology and allow the audience to participate in the stunts. Ideas abounded and so did the curiosity to see where this creative enterprise will direct its resources in the years ahead.

What other companies can you think of which have disrupted their
industries in order to create a brand new category and achieve
sustainable competitive advantage? From a marketing perspective, what
other types of innovation can you envisage in the Cirque du Soleil
business model? And if you are lucky enough to see its new show, do
share with us your experience!

Tuesday, 9 October 2012

The Marketing Research for Decision Makers unit of the Master of Marketing program at the University of Sydney Business School has adopted a new approach this semester. Previously, the unit focused on teaching how to assess and evaluate marketing information so as to improve our decision making ability. This semester the learning objectives have been expanded to explicate psychological biases that cause us to routinely make bad decisions. Interestingly, these biases are a consequence of automatic and unconscious cognitive processes, which make it very difficult for us to not only avoid them, but increasingly difficult to even know when we are using them.

You would think that a person possessing high intelligence and extensive life experience would be relatively immune from cognitive biases. However, this is not so and this is what makes the unit both thought-provoking and challenging. To illustrate, in the most recent class the fundamental attribution error was discussed. This error concerns a universal tendency for people to overweight personality characteristics and underweight situational factors when attributing blame or the cause of a situation. In other words, people automatically attribute causes to the personality of others, even when situational factors are likely to be present. In the current US Presidential Election Campaign, Republican nominee Mitt Romney has made this error which has provided ammunition for President Barack Obama’s re-election advertising strategy.

In his now infamous gaffe, Romney suggested that 47% of Americans pay no income tax and will not vote for him because they believe they are victims who have become dependent upon government handouts. Further, he stated that these Americans believe “the government has a responsibility to care for them” and that they can never be motivated to take personal responsibility for their lives. Clearly Romney’s statement overweights personality characteristics because it assumes that all non-income tax paying Americans possess a free-loading disposition, believing the government owes them a living. Romney has seriously neglected salient situational circumstances that would explain why most of these Americans do not pay income tax. For instance, war veterans, seniors, blue-collar workers who currently earn low incomes; and college students do not pay income tax but you could not characterize them as people who are not taking personal responsibility for their lives.
Romney’s howler has provided President Obama with a telling message that he is canvassing in his “My Job” re-election advertising campaign. The strategy is distinctive because, sans President Obama’s endorsement at the beginning of the advertisement, contains no commentary from the President or his supporters. The advertisement implicitly advocates not voting for Romney by simply using his ill-chosen comments against images of people that represent the 47% of Americans he has miscategorised as lacking personal responsibility. It appears that Romney’s prediction that non-income tax paying Americans will definitely vote for the President could become a self-fulfilling prophecy!

How could an experienced political campaigner like Romney make such a critical error? As stated earlier, faulty biases tend to automatically influence our thought patterns. We do not necessarily know that they are distorting our cognitions when we are actually making decisions. It is most likely that Romney is now berating himself and cannot believe he said the comments he made. He probably now knows where his decision making process went wrong. However, it is generally easy to see the error in our ways after the fact; and in Romney’s case the error cannot be reversed and appears very damaging.

What can we do before we finalize our decisions that can assist us avoid these faulty cognitive biases? What we do know is that even knowledge of the different types of biases is no guarantee that we will not use them in our own decision making. Strategies to avoid cognitive biases are constantly being developed but generally focus on decision makers being more conscious of their thoughts and reasoning during each step of their decision making process. Ideally, a third party independent of the decision and with knowledge of cognitive biases should vet the process, highlighting areas of concern and then providing feedback. It is easier to detect cognitive biases in another person’s decisions as opposed to your own. Perhaps an independent person reviewing Romney’s speech with knowledge of the fundamental attribution error may have stopped these words ever being said.

Thursday, 4 October 2012

There is only a very select range of products that can successfully implement a marketing strategy that revolves around ‘low supply and high demand’, with with the goal of increasing the desirability of a product and ultimately increasing sales.

One company in particular has proven particularly adept at this strategy. Apple has successfully done this time and time again for the release of a number of its products, the iPhone 5 being the most recent.

It would not be at all surprising if Apple fans worldwide would be well and truly over waiting in line to get their hands on the latest (and supposedly) greatest from Apple, but that is not the case.

Apple has strategically regulated the volume of iPhone 5 handsets available in the market to be well below demand, justifying bragging rights to all who have been 'lucky' enough to get one.

Moving forward, Apple might need to rethink their marketing strategy, especially with the appealing features that their competitors are sporting. For instance, Samsung's Galaxy S3 has a number of advantages over the iPhone 5, including a larger screen, better resolution, and a significantly longer battery life both in standby mode as well as during talk time.

Samsung has used the hype of the iPhone 5 launch to their advantage by informing potential iPhone 5 buyers of the features of their Galaxy S3 smartphone through mainstream media as well as through social media channels.

Also, Samsung's presence outside Apple stores in several major cities during iPhone 5's launch week was subtle, but Samsung's message was clear and well in line with their tag line: 'It Doesn't Take a Genius'

The implication of that tagline being that it really doesn't take much thought to grasp the clear advantage the Galaxy S3 has over Apple's iPhone 5. Samsung's other tag line: 'The Next Big Thing Is Already Here' is a head on attack to Apple's tag line: 'The biggest thing to happen to iPhone since iPhone'.

After completing a class in Innovative Marketing Strategy as part of my Master of Marketing degree at the University of Sydney, I'm fascinated to see how Apple will adjust their marketing strategy for the future. It will also be very interesting to see how Samsung copes with more prominent up and coming competitors in the smart phone market , such as Nokia's new Lumina handset.

I’d be very interested in hearing your thoughts on the marketing strategies that Apple and Samsung are employing. Please feel free to have your say in the comments section below.

Tuesday, 2 October 2012

A largely controversial decision made recently by the Advertising Standards Board (ASB) has deemed companies accountable for user-generated comments on their Facebook pages. Posts from ‘fans’ are now considered to be advertisement, which means these should adhere to the industry’s Code of Ethics and the Australian Consumer Law. Because companies have a ‘reasonable degree of control’ over third-party comments, they are expected to vet content that is sexist, racist or factually inaccurate.

The ruling was a result of complaints against third-party comments posted on the Facebook pages of both Diageo’s Smirnoff brand and Fosters’ VB brand. While Diageo’s complaints were not upheld, Fosters were found to breach sections 2.1, 2.4 and 2.5 of the Code due to the sexist, racist and generally offensive content of its page. The fact that Fosters confessed it did not screen or maintain their page was the main reason for the case to be upheld, which demonstrates the heart of the problem.

There seems to be a disconnect between what companies value and what they practice. According to a study by Deloitte, 58 per cent of company's top executives thought corporate reputation risk associated with social media practices should be part of the board room’s agenda; however, only 17 per cent of them had processes in place to actually monitor the data.

Large brands have massive volumes of posts to moderate and the ruling puts the burden on companies to ensure that social media campaigns are executed in a compliant manner, as well as to monitor and moderate the comments. Some companies argue the ruling has turned people's opinions into statements of facts and question whether they could have complied with the law simply by putting a disclaimer on top of their pages stating the posts are merely opinions of third parties.

On the other hand, small businesses worry about being pushed out of social media due to lack of resources to monitor comments. However, the ACCC states that it does take the size of a company into consideration. While large brands are expected to monitor their pages daily and remove non-compliant content within 24 hours, the expectations for smaller players is slightly less rigorous.

From a consumer’s perspective, the ruling is seen by many as an infringement on freedom of speech. It sets a legal precedent that could be applied to comments in other social media like Twitter and even personal blogs in Australia and beyond. Adding to the debate, Facebook Terms of Service states that a person owns all the content they post on Facebook, which would exempt the company from the responsibility. The Facebook Community Standards policy also covers many of the requirements of the AANA Code of Ethics; however, it is unlikely that Facebook would enforce these.

As a result of the ruling, The Communications Council (TCC) has launched a new social media code of conduct, covering best-practice in terms of business integrity, transparency and honesty. To ensure a company’s brand page is compliant with these standards, certain practices should be observed including adequate social media planning, moderation of comments and action within the stipulated timeframe. On that note, it is often best to reply and correct misleading or inaccurate comments than to delete them altogether. This will ensure companies comply with the Code without damaging the transparency and true spirit of social media.

Facebook, regardless of its social nature, is after all another media channel and monitoring and moderating requires proper planning and allocation of resources. Frequently brands treat social media as a cheap form of advertising and fail to establish a true dialogue with their audience. Why create a social media presence if you are not listening, replying, engaging and intervening when required? This is essentially where the real value of social media lies.

For companies like Fosters, the ruling will ensure the observation of a common decency standard. They now have in place ‘house rules’ guidelines on their Facebook page, which is monitored twice daily. By contrast, ethical companies, who have already instigated good moderating practice, things will not change much. Essentially, best practice in social media has now just become part of the industry regulation.

So, how is your company dealing with the new rules in the social media environment?

About the Bloggers

Alyce Brierley is a student in the Master of Marketing Program at the University of Sydney Business School. With a degree in Creative Industries (QUT), she has recently returned to Australia after working for the last six years in Paris as Copywriter and an English Language Consultant. Alyce is a culture, travel, food, and wine enthusiast with a love for learning languages. She is currently working in partnership with a tech start-up in the wine industry as a wine blogger.

Bowie Chen is from China and a current student in the Master of Marketing program at the University of Sydney Business School. Bowie has several years experience working in FMCG marketing, media (esp. TV station), and consulting firms.

Hazel Chen has 8 years work experience in the Beverage Manufacturing Industry with the role as Technical Leader and Manager, covering Logistics, Marketing, Laboratory and Prototyping function. As a part of Master of Marketing program, she has the confidence to consolidate all the experience with Marketing study to understand overall market to a great extent.